Neck Tension

It is true that if you increase the tension on your truss rod to lower your action you would also alter your tone? It seems that since a higher tension has been put on the neck that the resonant freq. of the neck would be raised. It seems when I crank my action down that the tone of my bass takes on a more compressed type of sound.

Tightening the truss rod puts pressure on certain parts of the neck in order to change the neck relief (in many cases effectively lowering the action). The strings are at the same tension you started with. I'm not sure how the resonance of the neck reacts, if at all, to increased truss rod pressure, but I don't think it's a foregone conclusion that the resonant frequency goes up, since no mass (but perhaps some stiffness) has been added to the neck.

I think that most of the tone differences between high and low action have to do with the amount of fret noise and the tension increase due to fretting a string that is higher or lower off of the board.

I'm with Matt--it seems to me that the main reason you're noticing this tonal difference is not because of any change in the tension of the neck, but because the lower action keeps the strings from vibrating so freely. At least, that's what it seems like from my own experiences with high vs. low action.

It's easy enough to check out for yourself, though. With the truss rod adjusted as you would adjust it for a low action (i.e. fairly little relief), try setting the bridge saddles for low action, then raise them up for higher action. Most folks find that higher action gives more dynamic range, at the expense of some ease of playability. Everything's a tradeoff!